By Sam Boughedda
Investment firm Kerrisdale Capital released a short report on Lightwave Logic Inc (NASDAQ:LWLG) on Thursday, describing the company as a "failure" and stating that it "has been perpetually stuck in 'development stage' status for more than thirty years."
Lightwave Logic shares have tumbled 13% since the report.
Speaking on the company's share price rise in June last year, Kerrisdale explained that it was "in tandem with some well-timed investment conference presentations, excitable message board postings from long-suffering shareholders, and an extremely favorable environment for retail-driven stock frenzies," and it has managed to maintain some of those gains.
However, Kerrisdale said it is a "façade of accomplishment," and there "is almost nothing of substance."
Lightwave describes itself as a technology platform, using its proprietary technology platform to develop next-generation electro-optic polymers which increase the efficiency of internet infrastructure.
However, Kerrisdale says the company "hasn’t ever come close to commercializing anything: in the 15 years since it’s gone public, it has generated a total of about $6 thousand in revenues, which stands in stark contrast to the steady stream of promotional announcements celebrating overhyped prototype completions, product tests, and patents over that time.”
Adding: "The most damning detail we discovered about Lightwave’s commercialization efforts is that no one knows how to consistently produce its proprietary polymer."
In a scathing assessment, Kerrisdale stated the company's shareholders show "blind faith" in CEO Michael Lebby.
"We think Lebby has tailored a narrative that’s just believable enough to naïve investors, but that falls apart when viewed in the context of the underlying trends in photonics. The company’s grandiose claims about its technology will have turned out to be little more than an optical illusion," the investment firm stated.